This section is from the book "Dart's Treatise On The Law And Practice Relating To Vendors And Purchasers Of Real Estate", by J. Henry Dart . Also available from Amazon: A treatise on the law and practice relating to vendors and purchasers of real estate.
(h) Grant v. Mills, sap. The
- but it may do so.
Cases may, however, arise where the circumstances under which a merely personal security has been taken would show "a clear and manifest intention of the parties" (i) that the lien should he abandoned : e.g., where a mortgage of the estate was taken for part of the purchase-money, and a note for the rest (k). And it may be that the personal security is itself the actual consideration, and not merely a security for the purchase-money (/).
And where the consideration for the sale is an annuity or other periodical payment, the vendor will not lose it in the absence of circumstances negativing the intention to retain the lien (m), by taking a bond or covenant for payment (n). Nor does the fact of the payment of the purchase-rnoney being postponed till the death of the vendor, but secured by a bond, of itself evidence an intention to abandon the lien (o).
Lien in cases of annuity consideration not affected by bond;
Where, however, from the form of the transaction, or other circumstances, it appears that the bond or covenant is in fact given in substitution, and not as mere security for the payment of the consideration money, the lien is lost. Thus, where an equity of redemption was sold in consideration of two annuities, which were granted and covenanted to be paid by a deed of even date with the conveyance, and the except under special circumstances.
Decision in Cood v. C, (1822) 10 Pr. 109, seems to imply that the lien would then be gone.
(i) Per Lord Lyndhurst in Winter v. Lord Anson, (1827) 3 Rus. at p. 492 ; 6 L. J. Ch. 7.
(k) Bond v. Kent, (1G92) 2 Vern. 281 ; and see Capper v. Spottiswoode, (1829) Taml. 21; Re Brentwood Brick Co., (1876) 4 Ch. D. 562: 46 L. J. Ch. 554.
(/) Sec Re Albert Ass. Co., (1870) 11 Eq. 164, 178; 40 L. J. Ch. 166.
(m) As to what will amouut to Bucb. evidence, see Dixon v. Gayfere, (1857 1 I). & J. 655.
(n) Tardiffe v. Scrughan, (1769) cited 1 Br. C. C. 423, which, though criticised by Lord Eldon in Mackreth v. Symmons, (1808) 15 Ves. 352, and by Shadwell, V.-C, in Clarke v. Boyle, (1830) 3 Si. at p. 502, is now an established authority ; see Jiich-ardson v. M'Causland, (1817) Beat. 457,460; Sug. 14th ed. 676; and Buckland v. Pocknell, (1843) 13 Si. 406, 412. See also Malthew v. Bowler, (1847) 6 Ha. 110; 16 L. J. Ch. 329; Collins v. C, (1862) 31 Beav. 346; Davie v. Thomas, 1900, 2 Ch. 461 ; 69 L. J. Ch. 643.
(o) Winter v. Lord Anson, (1827) 3 Rus. 488 ; 6 L. J. Ch. 7.
Conveyance was expressed to be made by the mortgagor and mortgagee in consideration of the annuities having been so granted, and of the mortgage debt having been paid by the purchaser, it was held, that the circumstance of the separate deed being taken as a security for the annuities, and the mode in which the consideration was stated in the conveyance, evidenced an intention that there should be no lien (p).
So, where a reversion was sold in consideration of immediate life annuities, which were secured by bond, Lord Eldon, looking to the nature of the estate, and the fact of a bond being taken, held, that there was no lien: the annuities might all determine before the reversion fell into possession; and this, coupled with the fact of the vendor taking the bond, showed that he did not intend the lien to subsist (q) : but there were special circumstances in this case, which showed an intention on the vendor's part to rely merely on the personal security; and it cannot be (as it has sometimes been) regarded as an authority for the proposition that there can be no lien where the estate is sold in consideration of an annuity, secured by a bond or covenant (r).
Whether affected by bond in case of sale of reversion.
"Where the contract was to sell in consideration of an annuity for three lives payable quarterly, and "to be secured by bond," it was held, that the land was free; though the vendor was entitled to have the annuity secured by a bond, before he could be called on to convey the estate. The Court did not dispute the authority of Winter v. Lord Anson; but considered that the terms of the contract, and the circumstance that the existence of such an annuity as a charge upon the property would have seriously interfered with alienation, rebutted the general presumption (s).
Lien waived by special terms of contract.
(p) Buckland v. Pocknell, (1843) 13 Si. 406 ; Frail v. Ellis, (1852) 16 Beav. 350 ; 22 L. J. Ch. 467.
(q) See Mackreth v. Symmons, (1808), and generally the notes thereto in Wh. & T. L. C. 7th ed.
(r) See Sug. 869, 11th ed. ; and see 14th ed. p. 676, n.
(s) Dixon v. Gayfere, (1857) 1 D. & J. 655, see and consider judgment ; Dyke v. Rendall, (1852) 2 D. M. & G. 209; 21 L. J. Ch. 905.
And generally where the mortgage, bond, or other security is taken by way of substitution for the purchase-money, and is in fact itself the consideration, no lien exists (t). Whether or not this is the case is a question of intention, which must be decided by looking "at the instruments executed by the parties at the time " (u).
General rule as to waiver of lien.
And since taking a substantive and independent security destroys the lien, not by virtue of any technical rule, but merely by indicating the intention of the vendor, the lien may, notwithstanding the security, be preserved, either by express agreement, or by any expressions negativing the presumable intention to abandon it (x) ; e.g., a stipulation that the estate shall not be sold until the money is paid, or unless with the consent of the vendor and the surety (y) ; or by parol evidence negativing such presumable intention (z) ; and this, though such intention be collected from the terms in which the consideration is stated on the face of the conveyance, and acknowledged in the receipt (z). And, on the other hand, the intention to abandon the lien, in cases where only a note or bond is taken, may be evidenced by a parol express agreement (a) ; or by expressions inconsistent with its continuance ; e.g., expressions referring to a re-sale of the property before the time fixed for payment of the amount clue to the vendor (6) ; and the same would be the rule in a case where no security was taken. It was decided by Lord Eldon that the nature of the transaction may show that the lien is to subsist as to part of the unpaid purchase-money, but not as to the residue (c).